The MBTA raised $70 million last year by increasing fares on buses, trains, and subways. But it will not be enough money to prevent an estimated $75 million deficit in the spending plan for the budget year that begins in July.
"We're broke," Daniel A. Grabauskas, general manager of the Massachusetts Bay Transportation Authority, said yesterday. Grabauskas said in a phone interview he has ruled out another fare increase this year, as well as any cuts in scheduled services for buses, trains, and subways. But he would not discuss how the agency will fill the gap in the $1.4 billion budget, deferring that question until his board discusses it publicly. And he declined to predict when the next fare increase will come.
His deputy, chief financial officer Jonathan Davis, said last week that the T could refinance some of its $8.2 billion in debt and interest payments, but cautioned that it would push future costs even higher and may not fill the entire gap.
The T is stuck in a harsh cycle of institutional poverty wrought by decades of borrowing. Of every dollar it spends, 27 cents goes to pay off debt. Because fares pay for only about a third of operating costs, the transit system has relied on state subsidies to keep the trains and buses moving. The deficits are only expected to grow in the coming years.
In the 2006 and 2007 budget years, the agency dug into its rainy day budget for a total of about $15 million. This budget year, thanks to the fare increase, it narrowly avoided doing so. Davis said that even without a deficit right now, the T has unhealthy finances, with little money set aside for emergencies, and a dependence on borrowing for major maintenance projects.
"It seems to be an annual, very difficult challenge, to meet our bottom line, while trying to maintain our level of service and the quality of service," Grabauskas said.
The T has also been a victim of rising energy and labor costs as well as slow growth in the collection of state sales tax, its primary source of money.
Earlier this year, a panel appointed by the Legislature to evaluate the transportation budget problems recommended using state money outside the T's budget to pay off some of the authority's debt, but Governor Deval Patrick has not directly responded to the suggestion. Instead, he has been working on an overall plan to reorganize the state's various transportation bureaucracies, something his aides say will save money. But legislators are still waiting for specifics on the plan.
In the meantime, transit activists have continued to worry that the T is forced to scrimp on upkeep and that fare increases have not improved service.
"When we talk to people, they're tired of it," said Lee Matsueda, an organizer with the T Riders Union, an advocacy group. "It's very simple."
The latest fare increases went into effect last January after lots of public debate and some acrimony. Bus fares went from 90 cents to $1.25, and subway rides went from $1.25 to $1.70 for commuters who pay with a Charlie Card; those who buy single tickets pay more. Most commuter rail passes went up by 22 percent.
Grabauskas said further increases would drive away riders. The T increased fares in 2004 by 20 percent on buses and 25 percent on subways. But the T had very few increases between 1980 and 2000.
The transportation finance panel recommended the T increase fares by about 10 percent every three years, so riders would not see big increases all at once.
"We can't double fares every 6 years. That's for sure," said Stephen Silveira, who chaired the commission. "You're just better off if, like your milk, like your bread, your price goes up regularly and you just adjust to it slowly."
The T's board of directors meets tomorrow, and is expected to review its budget at the March meeting.
Noah Bierman can be reached at nbierman@globe.com.
